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What Is OTT Programmatic Advertising?

As SMB’s and corporations work to locate and adopt new digital advertising platforms, Over The Top TV (OTT Advertising) and Connected TV Advertising are accelerating faster than any other digital marketing channel. People are consuming more and more video content through their smartphone devices as well as through laptops and desktops. YouTube began the trend of video adoption into smartphones and laptops. But now that sense of comfort has proven consumers can watch longer form content. So when you see trends of consumers adopting OTT Platforms at a higher rate, there presents the cost effective opportunity for advertisers to engage with customers in ways they may not have in the past.

With an estimated 155 million US adults now accessing streaming video with services like YouTube TV, Hulu, CBS All Access, Sling, and devices such as Roku, Amazon Fire TV, and Apple TV, a new medium known as OTT (over-the-top) advertising has emerged. This allows brands to reach their audiences directly within their living rooms and on their mobile smartphone devices.

OTT (over-the-top) advertising allows marketers and brands to directly reach viewers over the internet through streaming video services or devices such as smartphones, laptops, and connected TV (CTV) devices. The term “over-the-top” comes from the ability for viewers to bypass traditional TV providers such as Xfinity and DirecTV that control media distribution, thus giving advertisers the ability to reach their audiences directly.

This level of video advertising has presented incredible opportunities for brands in the sense that they no longer have to execute pre-planned broad media buys. No more expensive broadcast TV advertising or an esoteric world around TV broadcast advertising that few SMB’s can play in. Instead, brands and advertisers can go directly to OTT Platforms and Media Companies and buy OTT inventory space programmatically while coupling it with audience data to reach the ideal market.

There is a misnomer that platforms like Netflix constitute OTT Advertising. But it is mainly those platforms that allow for 15, 30 second, and 60 seconds video spots where commercial inventory is available via streaming apps, devices and websites.

Types of OTT Ads

Now that you’ve understood what OTT advertising is, it’s time to look at the multiple formats of OTT advertising. They offer unique advantages, depending on your campaign goals and target audience. Here are the most common types and how they can best serve your marketing needs:

Pre Roll Ads (15 to 30 seconds): These ads appear before the chosen content starts. They offer high viewability but can be troublesome if not executed well. Keep them short, engaging, and relevant to the surrounding content to grab the viewer’s attention before they hit the skip button.
Mid Roll Ads (30 seconds to 2 minutes): These ads appear during commercial content breaks and offer a natural pause in the content to tell your story. However, you need to use them strategically. Too many mid-roll interruptions can lead to viewer frustration. Consider the program length and natural breaks when placing mid-roll ads.
Post Roll Ads: These ads appear after the content finishes. Post roll ads are ideal for leaving a lasting impression. Use them to remind viewers about your brand or product, display a special offer, or encourage them to visit your website.
Native Ads: These ads blend into the streaming services and appear as sponsored content on display ads. They can be a great way to capture attention subtly.

How Does OTT Advertising Work?

OTT ads might sound complex, but the core process revolves around automation and precision targeting. Let’s understand the process.

Campaign Setup: You, the advertiser, define your goals, target audience, and budget. This means you need to specify demographics, interests, and desired ad formats (preroll, midroll, etc.).
Supply and Demand Marketplace: Programmatic platforms are a marketplace where publishers (streaming services) offer their ad inventory or available ad space, and advertisers bid for that space.
Data Drives Decisions: The platform utilizes data from various sources to deliver targeted ads. This data could include viewer demographics, viewing habits, and device usage.
Real-Time Matching: The platform matches your campaign criteria with the most relevant ad inventory from participating streaming services using complex algorithms. This happens live for efficient allocation of ad space.
Ad Delivery and Optimization: Once matched, your ad is delivered to viewers on their chosen devices, whether it’s a smart TV, smartphone, or tablet. The platform continuously monitors campaign performance and allows you to optimize your strategy based on real-time data.

Why Enterprises Are Leveraging OTT Video – The Benefits

SMB’s have been shut out of the broadcast advertising space for quite some time. Coupled with the need for smaller brands and SMB’s to drive customers and cash flow in the short term, OTT Advertising is giving brands a new opportunity to drive top, middle, and sometimes bottom-of-funnel patrons to their enterprises.

There are many reasons why more and more brands are adopting OTT Advertising. And in most cases, the benefits far outweigh the challenges and setbacks in leveraging Over The Top TV Advertising.

Viable Complement To Your Overall Media Mix

Some people look at video advertising as top-of-funnel awareness-building tactics. Still, we have seen video tactics, and, in this case, OTT Advertising complements driving people down the funnel while reaching people who are in-market due to the audience targeting and psychographic targeting capabilities available with programmatic display advertising. When you combine OTT Advertising with certain powerful targeting tactics, such as household addressable geofencing, you gain more efficiencies in your ad spend compared to traditional linear TV advertising.

Larger Audience Reach

More than 50 million subscribers are expected to ditch their cable and satellite boxes by next year. This is a steep increase from the numbers estimated a few years ago. And as noted by emarketer, the adoption of ott platforms such as YouTubeTV and Hulu continues to grow.